Tag Archives: quarter

Marguerite Arnold

A Busy 4th Quarter Heralds An Amazing Cannabis Year Globally

By Marguerite Arnold
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Marguerite Arnold

In retrospect, when the cannabis history books are written, 2018 may come to represent as much of a watershed year as 2014. Much has happened this year, culminating in a situation, much like at the end of the first year of modernization, where great victories have been achieved. But a long road to true acceptance and even basic and much broader medical use still beckons. Even if the new center left ruling coalition party in Luxembourg has just announced that recreational cannabis reform is on its agenda for the next five years.

This is a quick and by no means a full review of both fourth quarter activity globally, and how that ties into gains for the year.

Canada Legalizes Rec Sales

Beyond all the other banner headlines, October 17 will go down in history as the day that Canada switched the game.

Will 1017 replace 420? Not likely. But it is significant nonetheless.

What does this mean for the rest of the industry (besides international border checks and lifetime bans for Canadian executives and presumably others traveling into the U.S. to cannabis industry conferences at present)? For starters, a well-capitalized, public industry which is building infrastructure domestically and overseas like it is going out of style.

This is important for several reasons, starting with the fact that the big Canadian LPs are clearly not counting on supplying Europe from Canada for much longer. Why? The big European grows that were set up last year are starting to come online.

So Does California…

And other significant U.S. states (see Massachusetts this month and Michigan) are following suit. However the big issue, as clearly seen at least from Canada and Europe, is there is no federal reform in sight. That opens up a raft of big complications that so far, most U.S. firms have not been able to broach. That said, this situation is starting to change this fall, with two U.S. firms entering both Greece and Denmark, but in general, a big issue. Canadian firms are still trying to figure out how to both utilize the public markets in the U.S. without getting caught in detention when crossing the border.the U.S. is continuing to be a popular place to go public for Canadian firms

Regardless, the U.S. is continuing to be a popular place to go public for Canadian firms, who are also looking for access to global capital markets and institutional capital. Right now, Frankfurt is off limits for many of them. See the Deutsche Börse. That said, with the rules already changing in Luxembourg, one firm has already set its sights for going public in Frankfurt next spring.

The German Situation

Like it or not, the situation in Germany is key to the entire EU and increasingly a global enchilada, and no matter where companies are basing their cultivation sites at this point, there are two big gems in the European cannabis crown. Deutschland is the first one because of the size of the economy, the intact nature of public healthcare and the fact that the German government decided to mandate that sick people could get medical cannabis reimbursed by their public health insurer.

german flag
Photo: Ian McWilliams, Flickr

Ironies abound, however. In the last quarter, it is clear from the actions of the Deutsche Börse that Frankfurt is not a popular place to go public (Aurora went public on the NYSE instead in late October).

The cultivation bid was supposed to come due, but it is now likely that even the December deadline might get pushed back again, interminably at least until April when the most recent lawsuit against the entire process is due to be argued.

In the meantime, there is a lot of activity in the German market even if it does not make the news. Distribution licenses are being granted all over the country (skip Berlin as there are already too many pending). And established distributors themselves, particularly specialty distributors, are increasingly finding themselves the target of foreign buyout inquiries.

There are also increasing rumours that the German government may change its import rules to allow firms outside of Canada and Holland to import into the country.

The German market, in other words, continues to cook, but most of it is under the surface a year and a half after legalization, to figure things out.

The UK

Next to October 17, the other date of note this fall of course was November 1. The Limeys may not have figured out Brexit (yet). But cannabis for medical use somehow made it through the national political fray this summer. Hospitalized children are compelling.

UKflagNow the question is how do other patients obtain the same? The NHS is in dire straits. Patients must still find a way to import the drug (and pay for it). And with newly imposed ex-im complications coming Britain’s way soon, there is a big question as to where and how exactly, patients are supposed to import (and from where). All looming and unanswered questions at the moment.

But hey, British doctors can now write prescriptions for cannabis.

Greece and Malta

Greece and Malta are both making waves across Europe right now. Why?

The licensing process that has continued into the fall is clearly opening up inexpensive cultivation in interesting places. Greece is growing. Malta, an island nation that is strategically placed to rival Greece for Mediterranean exports across Europe is still formalizing the licensing process, but don’t expect that to last for long.

Look for some smart so and so to figure out how to beat Brexit and import from Malta through Ireland. It’s coming. And odds are, it’s going to be Malta, if not the Isle of Mann that is going to clinch this intriguing if not historical cultivation and trade route.

Poland

Just as October came to a close, the Polish government announced the beginning of medical imports. Aurora, which went public the same week in New York, also announced its first shipment to the country – to a hospital complex.

Let the ex-im and distribution games begin!

It is widely expected that the Polish market will follow in German footsteps. Including putting its cannabis cultivation bid online whenever the Polish government decides to cultivate medical supplies domestically. The country just finalized its online tender bid system in general.

Does anyone know the expression for “pending cannabis bid lawsuit in Warsaw” in Polish?

Notable Mentions

While it gets little press outside the country, the Danish four year experiment is reaching the end of its first year. While this market was first pioneered by Canopy/Spectrum, it was rapidly followed by both Canadian LPs and others entering the market. Latest entrant this quarter? A tantalizingly American-British conglomerate called Indiva Ltd. as of November 21.

Italy is also starting to establish a presence in interesting ways as multiple firms begin to establish cultivation there.

There are also increasing rumours and reports that Israel might finally be able to start exporting next year. That will also disrupt the current ecosystem.

And most of all, beyond a country-by-country advance, the World Health Organization meeting in early November and in the early part of December is likely to keep the pressure on at a global level for rescheduling and descheduling the cannabis plant.

This in turn, is likely to set the stage as well as the timeline for rec use in Luxembourg. Look for developments soon.

A busy time indeed. Not to mention a quarter to end a very intriguing year, and certainly destined to sow returns for years to come, globally.

european union states

International Summer Cannabis Roundup

By Marguerite Arnold
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european union states

As August comes to a close, it is clear that it has been one busy quarter for market development – all over the place. Developments in the UK and Germany in particular, however, have been dramatic. In turn, this is also starting to bring other countries online – even as potential producers move in on the market and before real domestic medical reform has occurred (in countries ranging from Turkey to Spain).

And, say no more, Canada finally announced its “due date” in October.

How all three markets will move forward is also very interesting. They are all interrelated at this point, and even more intriguing, increasingly in synch.

This trend is also one advocates should take note of to push forward on further legislative and access issues going forward.

The EU looks poised to hop on the legalization train

In the future, no matter what happens with Brexit, developments in both the UK and Germany will continue to push the conversation forward in the EU, a region that is now the world’s most strategic (and globally accessible) cannabis market. Advocates, particularly in Canada and the U.S. right now, can also do much to support them.

Germany

Events here, while they may seem “slow” to outsiders, are in fact progressing – and as Cannabis Industry Journal has been reporting – quite fast even if the developments haven’t been (initially at least) quite as public. As this ‘zine wrote, breaking the news in July, the Federal German Drugs and Medical Devices Agency (BfArM) quietly posted the revised bid in July on a European tender site after refusing to confirm that it had sent out (undated) cancellation letters to previous hopefuls.  Applicants for the new tender have until October 22 to respond. It is expected, given the new focus on “coalitions” that there will be many more applicants from global teams.

Even more interesting is the informal “reference price” that BfArM is appearing to set for bid respondents (7 euros per gram) and the impact of that on all pricing going forward across the continent.

german flag
Photo: Ian McWilliams, Flickr

Within a week, it also emerged that the Deutsche Borse, the organization that regulates the German stock exchanges, and working via its third party clearing arm, refused to clear any trades of any publically listed North American cannabis company that are also listed in Germany. This is an interesting development for sure – particularly now. How it will impact the biggest companies (read publicly listed Canadian LPs) is unclear, particularly because they can now raise capital via global capital markets – including the U.S.

Earlier in the summer, one of the largest public or “statutory” health insurance companies in Germany issued the “Cannabis Report.” It showed that cannabis has now moved out of “orphan drug territory” in Germany, and over 15,000 patients are now prescribed the drug. That said, over 35% of all claims are still being rejected. Most patients at this point, are also women older than 40.

The UK

It seems to be less than coincidence that the other big mover this quarter (and in fact most of the year) has been the UK. These two countries are linked by history and trade more than any other in Europe.

Epidiolex-GWAs of October, the country will not only reschedule cannabinoid-derived medicine to a Schedule II drug, but also allow more patients to access it. It is unclear how fast reform will come to a country in the throes of Brexit drama, but it is clear that this discussion is now finally on the table. What is also intriguing about this development is how far and fast this will open the door for other firms to compete, finally, with the monopoly enjoyed by GW Pharmaceuticals in the British Islands since 1998.

In one of the quarter’s biggest coups that stockholders loved but left the domestic industry with few illusions about the fight ahead, GW Pharmaceuticals also announced that it had managed (ahead of all U.S.-based producers and firms and even rescheduling in the U.S.) to gain U.S. federal government approval to import a CBD-based epilepsy drug (Epidiolex) into the United States from the UK and thus gain national distribution.

Canada

While it was more inevitable (and planned for) than developments in Euro markets, Canada also moved forward this quarter. There is now a set date for a recreational market start.

What is even more interesting is that the next formal “steps” in all three markets are now timed to coincide within weeks of each other in October this year.

Canadian producers of course are in the leading position to enter both German and British markets. Further their production centers now springing up all over Europe are supplying both their source markets and will be available for international distribution.